Mohinuddin Qureshi Vs ITO (ITAT Jaipur)
Property Sale Receipt in POA Holder’s Account Requires Evidence-Based Examination: ITAT
Background of the Reassessment
The proceedings originated from information in the Individual Transaction Statement indicating sale of immovable property for Rs. 8,21,000. The value adopted for stamp-duty purposes was Rs. 11,10,214.
As the assessee had not filed a return of income, the Assessing Officer issued a notice under section 148 on March 23, 2015.
In the absence of compliance, reassessment was completed on March 8, 2016. The officer added Rs. 11,10,214 concerning the property transaction and a further Rs. 2,00,000 as estimated income.
Total income was consequently determined at Rs. 13,10,214.
The assessee challenged the assessment before the CIT(A), National Faceless Appeal Centre.
Assessee Claimed to Act Only for Property Owner
The assessee explained that Sayar Chand Bairwa was the actual owner, and that he had acted only as the owner’s power-of-attorney holder.
According to the assessee, the power of attorney expressly authorised him to execute the sale documents and receive the sale proceeds.
He maintained that receipt of consideration in his account occurred in that representative capacity.
The CIT(A) obtained a remand report from the Assessing Officer. In that report, the officer relied on the fact that the consideration was credited to the assessee’s bank account rather than directly to the stated owner’s account.
From this circumstance, the officer inferred that the assessee was the actual owner.
Missing Evidence of Onward Transfer Was Decisive Before CIT(A)
The CIT(A) sought bank statements and supporting evidence establishing that the money received by the assessee had subsequently been transferred to Sayar Chand Bairwa.
The assessee did not furnish the required material.
Consequently, the CIT(A) sustained the Rs. 11,10,214 addition, principally because the asserted onward transfer remained unproved.
However, the separate Rs. 2 lakh estimated-income addition was deleted for want of supporting material.
The CIT(A) also rejected objections concerning service of the section 148 notice, jurisdiction and inadequate opportunity, referring to the postal evidence and assessment record.
Delay Condoned Due to Representative’s Illness
The Tribunal appeal was filed with a delay of 70 days.
The assessee explained that the CIT(A)’s order was received at the authorised representative’s email address but was not communicated in time because of the representative’s serious illness and hospitalisation.
Affidavits from the assessee and representative, together with a hospital discharge summary, supported the explanation.
The Tribunal found sufficient cause, condoned the delay and admitted the appeal.
The condonation rested on the documented circumstances preventing timely communication and filing.
Assessee Offered to Produce Banking Records and Owner
Before the Tribunal, the assessee’s representative stated that the relevant bank statements and other supporting documents would be furnished to establish the representative nature of the receipt.
The assessee also expressed willingness to produce the actual owner before the Assessing Officer, if required.
The Tribunal noted that the sustained addition arose principally from the failure to establish the subsequent transfer of consideration.
Considering the offer to produce the missing evidence, it granted one further opportunity in the interests of justice.
The Tribunal did not, however, finally accept that the receipt belonged to another person.
Fresh Examination Must Follow Documents and Fund Flow
The Tribunal set aside the appellate order only to the extent of the Rs. 11,10,214 addition and restored that issue to the Assessing Officer.
The assessee may furnish bank statements and supporting evidence establishing receipt and subsequent transfer of the consideration.
The officer must examine the power of attorney, sale deed, flow of funds and other relevant material, provide a reasonable hearing and decide the issue afresh.
Importantly, the Tribunal directed that the conclusion must not rest merely on general presumptions about power-of-attorney transactions.
Final Decision and Scope of Relief
The appeal was allowed for statistical purposes.
The disputed addition was remanded for verification, rather than finally deleted on merits. The assessee must substantiate his claim through the documentary and banking evidence offered.
The Tribunal also kept the reassessment-validity grounds open without deciding them at this stage.
The order therefore grants a fresh evidentiary examination of whether the consideration was received and passed on in a representative capacity, while leaving the ultimate tax treatment to the Assessing Officer’s reasoned determination.
FULL TEXT OF THE JUDGMENT/ORDER OF ITAT JAIPUR
This appeal by the Revenue is directed against order dated 30.12.2024, passed by the Ld. National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as “Ld. CIT(A)”) for assessment year 2008-09, raising following grounds:-
1. Impugned assessment order dated 08.03.2016 passed under section 148 r.w.s 147 is bad in law and on facts being against the principal of natural justice, non- service of notices and for many more other statutory reasons.
2. The very action taken u/s 148 is contrary to the law as well facts resultantly the impugned assessment order passed u/s 148 dated 08.03.2016 is contrary to the law as well as facts and deserved to be quashed.
3. Under the facts and in the circumstances of the case and in law, Ld.CIT(A) erred in confirming the action of Ld.AO in making addition of Rs.11,10,214/- on account of alleged sale of property. The action of Ld. CIT(A) is contrary to the law as well as facts, without considering the submissions in the right perspective and deserves to be quashed.
4. Under the facts and circumstances, Ld. A.O. has erred by determining total income at Rs. 13,10,214/-, which was confirmed by Ld. CIT(A) to the extent of Rs.11,10,214/-. The income determined is excessive, unjustified or illegal and deserves to be deleted in full.
5. That the appellant craves your indulgence to add, amend, modify, delete or alter all or any grounds of appeal before or at the time of hearing.
2. At the outset, the learned counsel sought condonation of delay of 70 days in filing the appeal. It was submitted that the impugned order was received by the authorised representative, Shri Manish Mehta, on whose e-mail address the appellate communications had been served, but could not be communicated to the assessee in time owing to the representative’s serious illness and hospitalisation. In support, affidavits of the assessee and the authorised representative, along with the hospital discharge summary, were placed on record.
3. Having considered the explanation and the supporting material, we are satisfied that sufficient cause has been shown for the delay. The delay of 70 days is, accordingly, condoned and the appeal is admitted for adjudication.
4. Briefly stated, the case was reopened on the basis of information available in the Individual Transaction Statement indicating the sale of immovable property for a consideration of ₹8,21,000, with a value of ₹11,10,214 adopted for stamp-duty purposes. As the assessee had not filed a return of income, the Assessing Officer issued notice under section 148 of the Income-tax Act, 1961 (“the Act”) on 23.03.2015. In the absence of compliance, the Assessing Officer completed the reassessment on 08.03.2016, adding ₹11,10,214 on account of the property transaction and a further sum of ₹2,00,000 as estimated income, thereby determining the total income at ₹13,10,214.
5. In appeal, the learned CIT(A) obtained a remand report from the Assessing Officer. The objection regarding non-service of notice under section 148 was rejected on the basis of the postal evidence furnished by the Assessing Officer. The learned CIT(A) also rejected the challenge to jurisdiction and the plea of inadequate opportunity.
6. On the merits, the assessee contended that he had acted merely as a power-of-attorney holder for Shri Sayar Chand Bairwa, the actual owner of the property, and had received the sale consideration on the latter’s behalf. It was submitted that the power of attorney expressly authorised the assessee to execute the sale documents and receive the sale proceeds. In the remand report, however, the Assessing Officer observed that the consideration had been credited to the assessee’s bank account and not directly to the account of the alleged owner, and inferred that the assessee was the actual owner of the property.
7. The learned CIT(A) sought the assessee’s bank statement and supporting evidence to establish that the sale consideration received in his account had subsequently been transferred to Shri Sayar Chand Bairwa. As the assessee did not furnish the required evidence, the learned CIT(A) upheld the addition of ₹11,10,214. The separate addition of ₹2,00,000 was deleted for want of supporting material.
8. Before us, the learned counsel submitted that the assessee was willing to furnish the relevant bank statement and other supporting documents to establish that the sale consideration had been received in his capacity as power-of-attorney holder and subsequently transferred to the actual owner. It was further submitted that, if required, the owner could also be produced before the Assessing Officer to substantiate the claim.
9. We have heard the rival submissions and perused the material available on record. The assessee’s claim rests on the assertion that he acted as a power-of-attorney holder and received the consideration on behalf of the actual owner. The learned CIT(A) sustained the addition principally because the assessee failed to establish the subsequent transfer of the consideration to the alleged owner. The assessee has now expressed his willingness to furnish the relevant bank statement and supporting evidence. In the interests of justice, we consider it appropriate to afford the assessee one further opportunity to substantiate his claim.
10. Accordingly, we set aside the impugned order to the extent of the addition of ₹11,10,214 and restore the issue to the file of the Assessing Officer for fresh examination. The assessee shall be at liberty to furnish the relevant bank statements and other supporting evidence to establish the receipt and subsequent transfer of the sale consideration to Shri Sayar Chand Bairwa. The Assessing Officer shall examine the power of attorney, the sale deed, the flow of funds and any other relevant material, and decide the issue afresh in accordance with law after affording the assessee a reasonable opportunity of being heard. The claim shall be adjudicated on the basis of evidence and applicable law, without being influenced merely by general presumptions regarding transactions undertaken through power-of-attorney holders.
11. In view of the restoration of the matter for fresh adjudication on merits, the grounds challenging the validity of the reassessment proceedings are kept open and are not adjudicated upon at this stage.
12. In the result the appeal of the assessee is accordingly allowed for statistical purposes.
Order pronounced in the Open Court on 23.10.2026
